Europe’s Biggest Energy Users Oppose Fast-Track Carbon Fix

Feb. 20 (Bloomberg) -- Europe’s biggest energy using
companies urged lawmakers to avoid fast-track approval of a
proposal to tackle a record oversupply of carbon permits that
has divided policy makers.

The European Parliament’s environment committee yesterday
delayed by a week a decision on starting accelerated talks with
European Union states on a law change aimed at fixing a glut of
emission allowances that pushed prices to a record low. The
talks should start only after a debate in the full Parliament,
the Alliance of Energy Intensive Industries said in a letter to
lawmakers obtained by Bloomberg News.

Europe’s 54 billion-euro ($72 billion) cap-and-trade
system, the world’s largest, imposes emission limits on about
12,000 power plants and factories to spur investment in clean
technologies. The benchmark carbon futures contract has slumped
from 31 euros a metric ton in 2006 to as low as 2.81 euros last
month, a price the European Commission has said is too low to
encourage trade in the emission allowances.

“The plenary debate, followed by a vote, would allow all
members of the European Parliament to express their views and
provide required political support for the final decision,” the
AEII said in the letter.

Backloading Strategy

The Parliament is considering whether to amend the EU
emissions trading law that would make make explicit the European
Commission’s right to delay the sale of some permits in a
strategy known as backloading. The law change also needs the
support of national governments.

The Alliance represents the interests of more than 30,000
European companies in industries including petroleum, cement,
ceramic, paper and steel. It is opposed to backloading because
it pushes up energy costs “without any environmental benefit,”
according to the letter.

Members of the Parliament’s industry committee issued last
month a non-binding opinion to reject the commission’s proposal.
The environment committee, which is leading the work on the
measure in the assembly, backed the draft law change yesterday
in a recommendation for the full parliament.

While there are “significant” differences between the
industry and environment committees, “in the two committees
combined there were more votes opposing backloading than in
favor,” the AEII said. “This highlights the wide differences
in views and the importance of having a full, democratic and
transparent plenary debate on this crucial issue for the EU.”

The environment committee is due to decide on Feb. 26
whether to authorize its chairman Matthias Groote to start
negotiations with member states in the fast-track process. That
would limit the number of times the full assembly would have to
be consulted on the draft measure.

Otherwise, the whole Parliament would vote first on the
environment committee’s position before talks take place between
the assembly and states, known as a trilogue. That option,
sought by the AEII, may delay a final verdict.